Supreme Court Declines Bombardier Tax Case Review

The U.S. Supreme Court has declined to review the case Bombardier filed against the Internal Revenue Service over the taxation of management fees charged by its former Flexjet fractional operation. Today, the high court released a summary of its disposition of cases considered during its June 22 conference. 

Bombardier on February 19 asked the Supreme Court to overturn determinations of earlier courts, which found that the IRS has properly taxed fractional operation management fees as commercial air transportation activities. Backed by amicus briefs of NATA and NBAA and other fractional operators, Bombardier had urged the Supreme Court to accept the case, saying “correcting those errors” of the earlier court determinations “is vital not only for the aviation industry—as the multiple amicus briefs filed by industry participants attest—but also for the wide range of entities charged with collecting various taxes on the IRS’s behalf, including excise, sales and employment taxes.”

The government, however, argued that the lower courts properly sided with the IRS and dismisses Bombardier’s arguments of inconsistent and unclear guidance from the IRS. The decision against a review of the case was anticipated, since the Supreme Court rarely accepts tax cases.